CH Energy Group Reports Annual Earnings.POUGHKEEPSIE Poughkeepsie (pəkĭp`sē), city (1990 pop. 28,844), seat of Dutchess co., SE N.Y., on the Hudson River; settled 1687 by the Dutch, inc. as a city 1854. , N.Y. -- CH Energy Group, Inc. (NYSE NYSE See: New York Stock Exchange :CHG CHG Change CHG Charge CHG Changed CHG Chlorhexidine Gluconate (aka chloraprep) CHG Centre Hospitalier Général (French: general hospital) CHG Come Holy Ghost (Catholicism) ) today announced earnings per share during 2004 of $2.69 per share, down 9 cents from the $2.78 per share posted in 2003. Both operating subsidiaries An operating subsidiary is a business term frequently used within the United States railroad industry. In the case of a railroad, it refers to a company that is a subsidiary but operates with its own identity and rolling stock. reported improved operating results for the year, despite the milder weather that depressed Depressed A description of a market, security, or product that is experiencing weak demand and lowering prices. Notes: A depressed market, security, or product implies that prices and volume are low. There are many reasons for a depressed market, security, or product. sales volumes in 2004, as compared to 2003. Increased business development costs and reduced investment income lowered total annual earnings. "These year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. results fell within the range we projected. We've we've Contraction of we have. we've have chosen to keep our re-deployable equity in more-liquid, short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments so that we have ready access to this capital while we explore new business opportunities. And, we expended ex·pend tr.v. ex·pend·ed, ex·pend·ing, ex·pends 1. To lay out; spend: expending tax revenues on government operations. See Synonyms at spend. 2. approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 5 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. investigating new ventures last year, as we continue to seek opportunities to invest to enhance shareholder value for the long term," said Steven Ste´ven n. 1. Voice; speech; language. Ye have as merry a steven As any angel hath that is in heaven. - Chaucer. 2. An outcry; a loud call; a clamor. To set steven to make an appointment. V. Lant, Chairman of the Board, President and Chief Executive Officer. "We're we're Contraction of we are. we're we are optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op that we'll we'll Contraction of we will. we'll we will or we shall we'll will ~shall find appropriate investment opportunities for our approximately $90 million of re-deployable equity, which will provide a return over time that will more than offset the temporary effects of reduced investment income and development costs. And, we're encouraged by the increase in earnings per share we realized at both operating subsidiaries," said Lant. Central Hudson Hudson, towns, United States Hudson. 1 Industrial town (1990 pop. 17,233), Middlesex co., E central Mass., on the Assabet River, in an apple-growing region; settled c.1699, inc. 1866. Gas & Electric Corporation Despite milder weather in 2004 compared to 2003, annual earnings from this regulated reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. business unit increased by 2 cents, to $2.39 from $2.37 per share due to continued productivity improvements and electric sales growth of 2 percent from growth in the number of customers. Natural gas sales increased by 2 percent when normalized for weather, and natural gas revenues from large industrial transportation customers also increased. Also contributing to the increased earnings were reduced carrying charges Payments made to satisfy expenses incurred as a result of ownership of property, such as land taxes and mortgage payments. Disbursements paid to creditors, in addition to interest, for extending credit. Consumer Protection laws require full disclosure of all carrying charges. associated with the declining balance in the "Customer Benefit Fund," as that account was used to supply customer refunds, finance economic development activities, offset pension benefit costs and fund other programs. Central Hudson Enterprises Corporation (CHEC CHEC Children's Health Environmental Coalition CHEC Christian Home Educators of Colorado CHEC Commonwealth Human Ecology Council (UK) CHEC Coffs Harbour Education Campus ) "We saw continued improvement in the operating efficiency of our CHEC companies last year, which more than offset the impact of weather that was 6-percent warmer in 2004 as compared to that of 2003," Lant said. Earnings within the family of competitive fuel oil delivery companies were up 1 cent as compared to the previous year to 19 cents; weather-hedging contracts helped to offset the impact of warmer weather. CH Energy Group, Inc. Holding company earnings were 8 cents per share during the reporting period, a decrease of 13 cents compared to 2003. This was primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to reduced investment income and increased business development expenses. 2005 Earnings Projections Lant reiterated the Company's earlier projection projection, in psychology: see defense mechanism. See rear-projection TV, front-projection TV and LCD panel. (theory) projection - In domain theory, a function, f, which is (a) idempotent, i.e. that 2005 consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: annual earnings would total between $2.55 and $2.75 per share. Earnings expectations for individual subsidiary units were projected as follows: $2.15 - $2.25 per share from regulated utility Central Hudson; 20 - 25 cents per share from fuel distribution companies held within CHEC; and 20 - 25 cents per share, primarily interest income, from holding company CH Energy Group, Inc. and partnership investments of CHEC. About CH Energy Group With more than 440,000 customers, CH Energy Group, Inc. is a family of companies seizing new opportunities in the energy marketplace through two primary subsidiaries: Central Hudson Gas & Electric is a regulated transmission and distribution utility serving approximately 355,000 customers in eight counties of New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of State's Mid-Hudson River Valley, and delivering natural gas and electricity in a 2,600-square-mile service territory that extends from the suburbs of metropolitan New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. north to the Capital District at Albany Albany, town, Australia Albany (ăl`bənē), town (1996 pop. 14,590), Western Australia, SW Australia. It is a port on Princess Royal Harbour of King George Sound. The town has woolen mills and fish canneries. . Central Hudson Enterprises Corporation includes business units delivering energy and related services to nearly 85,000 customers in eight states and the District of Columbia District of Columbia, federal district (2000 pop. 572,059, a 5.7% decrease in population since the 1990 census), 69 sq mi (179 sq km), on the east bank of the Potomac River, coextensive with the city of Washington, D.C. (the capital of the United States). . Its regional footprint The amount of geographic space covered by an object. A computer footprint is the desk or floor surface it occupies. A satellite's footprint is the earth area covered by its downlink. See form factor. 1. stretches from Connecticut Connecticut, state, United States Connecticut (kənĕt`ĭkət), southernmost of the New England states of the NE United States. It is bordered by Massachusetts (N), Rhode Island (E), Long Island Sound (S), and New York (W). to the Washington Washington, town, England Washington, town (1991 pop. 48,856), Sunderland metropolitan district, NE England. Washington was designated one of the new towns in 1964 to alleviate overpopulation in the Tyneside-Wearside area. , D.C. area, as well as an interest in a Lexington Lexington. 1 City (1990 pop. 225,366), seat of Fayette co., N central Ky., in the heart of the bluegrass region; inc. 1832, made coextensive with Fayette co. 1974. , Neb., ethanol ethanol (ĕth`ənōl') or ethyl alcohol, CH3CH2OH, a colorless liquid with characteristic odor and taste; commonly called grain alcohol or simply alcohol. plant. Conference Call: Mr. Lant will conduct a conference call with analysts and investors to review financial results at 4:00 p.m. (ET) today, Feb. 11, 2005. Dial-in: 1-800-230-1951; Conference Name: "CH Energy Group." A digitized replay of the call will be available from 9:15 p.m. (ET) on Feb. 11, 2005, until 11:59 p.m. (ET) on Feb. 18, 2005, by dialing 1-800-475-6701 and entering access code # 769649. In addition, consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge are available on the Company's website at www.CHEnergyGroup.com. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Statements included in this news release, including its Appendix appendix, small, worm-shaped blind tube, about 3 in. (7.6 cm) long and 1-4 in. to 1 in. (.64–2.54 cm) thick, projecting from the cecum (part of the large intestine) on the right side of the lower abdominal cavity. and the documents incorporated by reference which are not historical in nature, are intended to be, and are hereby identified as, "forward-looking statements" for purposes of the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provided by Section 21E of the Securities Exchange Act of 1934, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. . Forward-looking statements may be identified by words including "anticipates," "believes," "projects," "intends," "estimates," "expects," "plans," "assumes," "seeks," and similar expressions. Forward-looking statements including, without limitation, those relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc Registrants' future business prospects, revenues, proceeds, working capital, liquidity, income and margins, are subject to certain risks and uncertainties that could cause actual results to differ materially from those indicated in the forward-looking statements, due to several important factors including those identified from time to time in the forward-looking statements. Those factors include, but are not limited to: weather; energy supply and demand; fuel prices; interest rates; potential future acquisitions; developments in the legislative, regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. and competitive environment; market risks; electric and gas industry restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). and cost recovery; the ability to obtain adequate and timely rate relief; changes in fuel supply or costs; the success of strategies to satisfy electricity requirements now that Central Hudson's This article is about the defunct chain of department stores. For the former parent company formed by the 1969 merger with Dayton's, see Target Corporation. Hudson's, or The J.L. major electric generation assets have been sold; future market prices for energy, capacity, and ancillary Subordinate; aiding. A legal proceeding that is not the primary dispute but which aids the judgment rendered in or the outcome of the main action. A descriptive term that denotes a legal claim, the existence of which is dependent upon or reasonably linked to a main claim. services; the outcome of pending litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. and certain environmental matters, particularly the status of inactive in·ac·tive adj. 1. Not active or tending to be active. 2. a. Not functioning or operating; out of use: inactive machinery. b. hazardous waste Hazardous waste Any solid, liquid, or gaseous waste materials that, if improperly managed or disposed of, may pose substantial hazards to human health and the environment. Every industrial country in the world has had problems with managing hazardous wastes. disposal sites and waste site remediation requirements; and certain presently unknown or unforeseen factors, including, but not limited to, acts of terrorism terrorism, the threat or use of violence, often against the civilian population, to achieve political or social ends, to intimidate opponents, or to publicize grievances. . Registrants undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Given these uncertainties, undue reliance should not be placed on the forward-looking statements. CH Energy Group, Inc. announces the following operating results for the periods indicated:
3 Months Ended December 31 2004 2003
---- ----
Operating Revenues $201,293,000 $188,517,000
Net Income $9,487,000 $11,461,000
Earnings Per Share - Basic $.60 $.73
Earnings Per Share - Diluted $.60 $.72
Average Shares Outstanding - Basic 15,762,000 15,762,000
Average Shares Outstanding - Diluted 15,768,000 15,766,000
12 Months Ended December 31 2004 2003
---- ----
Operating Revenues $791,512,000 $806,684,000
Net Income $42,423,000 $43,985,000
Earnings Per Share - Basic $2.69 $2.78
Earnings Per Share - Diluted $2.69 $2.77
Average Shares Outstanding - Basic 15,762,000 15,831,000
Average Shares Outstanding - Diluted 15,771,000 15,835,000
APPENDIX
Highlights Relative to the Prior Year
-------------------------------------
2004
More (Less)
Year Ended December 31: 2004 2003 than 2003
---- ---- -----------
Operating Revenues $791,512,000 $806,684,000 $(15,172,000)
Income Available for
Common Stock $ 42,423,000 $ 43,985,000 $ (1,562,000)
Earnings Per Share
of Common Stock (Basic) $ 2.69 $ 2.78 $ ( .09)
Average Shares Outstanding
(Basic) 15,762,000 15,831,000
Consolidated basic earnings per share of CH Energy Group, Inc. decreased $.09 per share in 2004 due to the following: CH Energy Group Inc., Holding Company (CHEG): - $.13 --Down $.06 from a reduction in investment income due primarily to the liquidation The collection of assets belonging to a debtor to be applied to the discharge of his or her outstanding debts. A type of proceeding pursuant to federal Bankruptcy , by July July: see month. 2003, of CHEG's Alternate alternate /al·ter·nate/ (awl´ter-nit) 1. following in turns. 2. pertaining to every other one in a series. 3. occurring in place of another; acting as a substitute. Investment Program and reinvestment Reinvestment Using dividends, interest and capital gains earned in an investment or mutual fund to purchase additional shares or units, rather than receiving the distributions in cash. 1. In terms of stocks, it is the reinvestment of dividends to purchase additional shares. of the proceeds in low risk and lower yield money market instruments Money market instruments See: Cash investments . --Down $.04 from an increase in business development costs. This increase reflects efforts to redeploy re·de·ploy tr.v. re·de·ployed, re·de·ploy·ing, re·de·ploys 1. To move (military forces) from one combat zone to another. 2. the capital made available from the liquidation of the Alternate Investment Program in suitable investment opportunities. --Down $.03 due to an increase in other expenses, which includes an increase in New York State income tax expense. Central Hudson Gas & Electric Corp. (CHG&E): + $.02 --Up $.12 due largely to a reduction in regulatory carrying charges due to customers resulting primarily from a declining Customer Benefit Fund ("Fund") balance. The decrease in the Fund results from the continuation continuation - continuation passing style of customer refunds in 2004; the ongoing funding of economic development initiatives and other programs; and the use of the Fund to offset deferred pension and other post-employment benefit costs, as authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: in CHG&E's modified mod·i·fy v. mod·i·fied, mod·i·fy·ing, mod·i·fies v.tr. 1. To change in form or character; alter. 2. settlement agreement with the New York State Public Service Commission ("PSC (Public Service Commission) Same as PUC. ") effective July 1, 2004. Earnings also increased due to a reduction in preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. dividends, reflecting the repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. of certain issues of preferred stock in October October: see month. 2003. The increase was partially offset by a reduction in miscellaneous interest income and capitalized interest Capitalized interest Interest that is not immediately expensed, but rather is considered as an asset and is then amortized through the income statement over time. In the context of project financing, interest that is paid by additional borrowing. . --Up $.11 from electric net operating revenues operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. due to an increase in sales (net of the cost of purchased electricity, fuel and revenue taxes). Electric sales increased 2% in 2004 as compared to 2003 and weather normalized sales increased 3%. The overall increase in sales was due to increased usage by existing industrial customers and an increase in residential and commercial sales resulting primarily from customer growth. The average number of residential and commercial customers each increased by 1%. The milder weather experienced during the first half of 2004 as compared to 2003 impacted net electric revenues by ($.01) per share, net of the effect of weather hedging hedging, in commerce, method by which traders use two counterbalancing investment strategies so as to minimize any losses caused by price fluctuations. It is generally used by traders on the commodities market. contracts. --Up $.03 due to an increase in natural gas operating revenues, net of the cost of gas and revenue taxes. After adjusting for the negative impact of weather ($.03 per share) including the effect of weather hedging contracts, growth in firm gas deliveries increased earnings by $.02 per share. Increases in large industrial transportation revenues added $.02 per share, and recovery of increased working capital and bad debt costs added $.02 per share. --Up $.01 due to the favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. impact of a lower number of CHEG common stock shares outstanding. --Down $.16 from electric regulatory mechanisms. Electric shared earnings increased by $.12 due to an increase in ratemaking rate·mak·ing n. The practice of establishing rates of payment, as for public transportation or utilities. rate operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. during the six months ended June June: see month. 2004 as compared to 2003 and a reduction in the sharing threshold The point at which a signal (voltage, current, etc.) is perceived as valid. per the provisions of the modified settlement agreement effective July 1, 2004. The remaining reduction was largely due to potential PSC assessments for service interruptions. --Down $.07 due to an increase in depreciation and amortization on utility plant assets. --Down $.03 due to an increase in taxes other than income taxes primarily related to an increase in property and payroll taxes Payroll Tax Tax an employer withholds and/or pays on behalf of their employees based on the wage or salary of the employee. In most countries, including the U.S., both state and federal authorities collect some form of payroll tax. . --Up $.01 due to the net effect of various other items including a reduction in income taxes. Central Hudson Enterprises Corp. (CHEC): + $.02 --Up $.05 due to a reduction in operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. (excluding the cost of petroleum and natural gas) due to improved operating efficiencies at the fuel oil distribution subsidiaries and fewer deliveries due to milder weather experienced in the first half of the year. The reduction in operating expenses also reflects a decrease of $.02 per share in operating expenses resulting from the sale of CHEC's natural gas business unit in October 2003. --Up $.01 due to increased net income from CHEC's energy services and investments in partnerships. --Down $.04 due to a decrease in net revenues (net of fuel and other related expenses) from CHEC's fuel oil distribution subsidiaries. Net revenues were reduced by $.05 per share due to the sale of the natural gas business. Service gross profit increased $.04 per share while gross profit from sales of petroleum products decreased $.03. The decrease in petroleum sales resulted from customer conservation due to the increased cost of heating oil and from a reduction in net accounts due to the roll-out of a new marketing program which focuses on customer profitability Customer profitability (CP) is the difference between the revenues earned from and the costs associated with the customer relationship in a specified period. According to Philip Kotler,"a profitable customer is a person,household or a company that overtime,yields a revenue rather than customer count. Heating degree-days were 6% lower in 2004 than 2003 affecting earnings by approximately ($.07); however, this was offset by weather hedging contracts. 2004 Results of Operations CH Energy Group, Inc. (Consolidated) Other Income on a consolidated basis decreased $4.0 million due primarily to a decrease in investment income from the liquidation of CHEG's Alternate Investment Program portfolio of securities by July 2003; an increase in business development costs by CHEG to find suitable investment opportunities in which to redeploy its available capital; and a reduction in CHG&E investment income and regulatory carrying charges due from customers related to pension costs. In its June 2004 Rate Order adopting the terms of CHG&E's Joint Proposal for Rate Plan Modification A change or alteration in existing materials. Modification generally has the same meaning in the law as it does in common parlance. The term has special significance in the law of contracts and the law of sales. , the PSC authorized the use of the Customer Benefit Fund to offset pension under-collection balances, which serves to further reduce the balance upon which carrying charges for pension costs are determined. This reduction in carrying charges was offset by a corresponding reduction in interest charges described below. Central Hudson Gas & Electric Corp. Utility sales of electricity for delivery within CHG&E's service territory increased 2% in 2004 as compared to 2003. Sales to residential customers increased 1%, sales to commercial customers increased 2% and sales to industrial customers increased 3%. Sales to residential and commercial customers increased due primarily to customer growth and increased usage despite milder weather in the first half of 2004 as compared to 2003. Industrial sales increased due to additional usage by existing customers. Actual heating billing degree-days were 9% less than last year and 4% lower than normal. Utility sales of natural gas delivered to firm CHG&E customers decreased 3% in 2004 as compared to the prior year. Residential and commercial sales, primarily space heating Space heating is the heating of a space, usually enclosed, such as a house or room. A space heater keeps the air and surroundings at a comfortable temperature for people or animals, or even plants in a greenhouse. sales, decreased 5% and 1%, respectively, due largely to a decrease in usage resulting from the milder weather experienced in the first half of the year. The decrease in sales was partially offset by customer growth. Industrial sales, representing approximately 5% of total firm sales in 2004 and 2003, decreased by 9%. Interruptible sales increased 3% due largely to an increase in sales to large industrial transportation customers. Utility electric and gas operating revenues decreased $24.9 million (4.3%) from $580.7 million in 2003 to $555.8 million in 2004. Electric revenues decreased $26.8 million (5.9%) and gas revenues increased $1.9 million (1.6%). The decrease in electric revenues is due primarily to a decrease in revenues collected through CHG&E's energy cost adjustment mechanism to recover its cost of purchased electricity; a reduction in Customer Benefit Fund revenues offsetting electric reliability program costs which effectively was completed by the end of 2003; and an increase in shared earnings. The reduction in electric revenues was partially offset by an increase in revenues from sales of electricity including the favorable effect of weather hedging contracts. Natural gas revenues increased due largely to an increase in revenues collected for the recovery of natural gas supply costs; an increase in natural gas sold for resale resale n. selling again, particularly at retail. In many states a "resale license" or "resale number" is required so that the state can monitor the collection of sales tax on retail sales. RESALE. ; and an increase in revenues from sales of natural gas, net of weather hedging contracts. An increase in shared earnings partially offset the increase in natural gas revenues. Total utility operating expenses, including income taxes, decreased $22.4 million (4.2%) from $538.3 million in 2003 to $515.9 million in 2004. Purchased electricity decreased by $17.0 million due largely to the recording of amounts related to the recovery of electric supply costs via CHG&E's cost recovery mechanism and a reduction in volumes purchased due to an increase in purchases by retail access customers. Other expenses of operation decreased $8.4 million due primarily to a reduction in expenses for CHG&E's electric reliability program and a decrease in storm restoration costs. The electric reliability program was effectively completed in 2003 and was funded by the Customer Benefit Fund. Partially offsetting the decrease in utility operating expenses was an increase of $1.4 million in the cost of purchased natural gas and an increase in income taxes. The increase in purchased natural gas was largely driven by an increase in wholesale costs partially offset by a decrease in costs relative to volume and also, amounts recorded related to the recovery of gas supply costs. Interest Charges and Preferred Stock Dividends decreased $4.5 million largely resulting from a decrease in regulatory carrying charges due to customers primarily due to a declining Customer Benefit Fund balance. In addition to providing additional customer refunds in 2004 and continuing to fund economic development initiatives and other programs, the Customer Benefit Fund was also used to offset deferred pension and other post-employment benefit costs, as authorized in CHG&E's modified settlement agreement with the New York State Public Service Commission ("PSC") effective July 1, 2004. The reduction in preferred stock dividends reflects the repurchase of certain issues of preferred stock in October 2003. Central Hudson Enterprises Corp. Sales of petroleum products for CHEC decreased 6.4 million gallons (4.2%) to 147.7 million gallons in 2004 from 154.1 million gallons in 2003. This was primarily due to a decrease of 8.2 million gallons (10.1%) in sales of heating oil from 81.4 million gallons in 2003 to 73.2 million in 2004. The reduction in sales was primarily due to warmer weather as evidenced by an average decrease of 6% in heating degree-days in 2004 as compared to 2003 and also, customer conservation due to the increased cost of heating oil. Additionally, the sales of propane propane, CH3CH2CH3, colorless, gaseous alkane. It is readily liquefied by compression and cooling. It melts at −189.9°C; and boils at −42.2°C;. gallons decreased .3 million gallons from 2.9 million gallons in 2003 to 2.6 million gallons in 2004. Partially offsetting the decreases in sales of heating oil and propane was an increase in sales of motor fuels. Gallons of motor fuel sold increased by 2.1 million gallons (3%) from 69.8 million gallons in 2003 to 71.9 million gallons in 2004. Due to the sale of SCASCO's natural gas business unit in October 2003, there were no sales of natural gas in 2004 as compared to sales of 1.8 million Mcfs in 2003. Revenues, net of the effect of weather hedging contracts, increased $9.7 million (4.3%) from $226.0 million in 2003 to $235.7 million in 2004. Revenues from petroleum products increased $24.1 million (12.6%) from $192 million in 2003 to $216.1 million in 2004 largely due to an increase in motor fuel revenues. These revenues increased $22.7 million (29.7%) from $76.4 million in 2003 to $99.1 million in 2004 due primarily to a rise in the average selling price The average sales price of goods or commodities. Especially used in the retail sector and technology distribution. of motor fuels and an increase in sales volume. Heating oil revenues also increased by $1.5 million to $112 million largely due to the effect of weather hedging contracts with more favorable terms for 2004 than 2003. Partially offsetting the overall increase in revenues is a reduction of $13.7 million in natural gas revenues due to the sale of SCASCO's natural gas business. Other revenues related to service and installations, energy services and propane sales decreased by $.8 million. Operating expenses for CHEC increased $9.8 million (4.5%) from $219.1 million in 2003 to $228.9 million in 2004. The most significant operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. for CHEC is the cost of petroleum, which increased $24.7 million due primarily to higher wholesale market prices of petroleum. This was partially offset by a decrease of $12.3 million in natural gas costs due to the sale of the natural gas business unit in 2003. Other operating expenses decreased $2.6 million largely due to improved operating efficiencies by the fuel oil distribution subsidiaries and lower sales due to milder weather experienced in the first half of the year. CH Energy Group, Inc. Fourth Quarter 2004 Relative to the Prior Year Earnings per share for the quarter ended December December: see month. 31, 2004 decreased $.13 per share as compared to the same quarter in 2003. The financial results for the quarter reflect decreases in electric and natural gas net revenues due primarily to the June 2004 completion of CHG&E's amortization of electric and gas delivery revenues. These revenues were deferred in the period July 1, 2001, to June 30, 2002, in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with a settlement agreement with the PSC. An increase in earnings from electric residential sales due to customer growth and increased usage partially offset the decrease in electric net revenues. Earnings also reflect a reduction due to an increase in CHG&E's operating expenses largely due to the maintenance of overhead electric distribution lines, mainly additional line clearance CLEARANCE, com. law. The name of a certificate given by the collector of a port, in which is stated the master or commander (naming him) of a ship or vessel named and described, bound for a port, named, and having on board goods described, has entered and cleared his ship or vessel efforts; and also, increases in depreciation and property taxes on utility plant assets. The increase in operating expenses was partially offset by a reduction in expenses related to storm restoration efforts. Earnings for CHEC and CHEG (the holding company) were comparable for both periods. Energy Group remains in a strong financial position. At December 31, 2004, the Company had $119.1 million in cash and cash equivalents. In addition, its current obligations included $12.0 million of short-term debt Short-term debt Debt obligations, recorded as current liabilities, requiring payment within the year. outstanding. Please note that this report plus the consolidated financial statements are available on the Company's website at www.chenergygroup.com.
CH ENERGY GROUP, INC.
CONSOLIDATED STATEMENT OF INCOME
(Unaudited) (Audited)
3 Months Ended 12 Months Ended
December 31, December 31,
------------------- -------------------
2004 2003 2004 2003
--------- --------- --------- ---------
(Thousands of Dollars)
Operating Revenues
Electric $100,743 $103,999 $430,575 $457,395
Natural Gas 29,010 27,005 125,230 123,306
Competitive Business
Subsidiaries 71,540 57,513 235,707 225,983
--------- --------- --------- ---------
Total Operating Revenues 201,293 188,517 791,512 806,684
--------- --------- --------- ---------
Operating Expenses
Operations - Purchased
Electricity and Fuel Used
in Electric Generation,
Purchased Natural Gas,
and Purchased Petroleum 127,897 110,481 498,287 501,516
Other Expenses of
Operation - Regulated
Activities 26,330 26,594 98,748 107,105
Other Expenses of
Operation - Comp. Bus.
Subsidiaries 14,179 14,476 53,666 56,195
Depreciation and
Amortization 8,799 8,668 34,640 33,611
Taxes, Other Than Income Tax 8,502 8,829 31,038 31,956
--------- --------- --------- ---------
Total Operating Expenses 185,707 169,048 716,379 730,383
--------- --------- --------- ---------
Operating Income 15,586 19,469 75,133 76,301
--------- --------- --------- ---------
Other Income
Allowance for Equity Funds
Used During Construction (103) 79 151 436
Interest and Investment
Income 2,095 2,815 9,920 12,225
Other - Net 2,546 2,518 7,391 8,810
--------- --------- --------- ---------
Total Other Income 4,538 5,412 17,462 21,471
--------- --------- --------- ---------
Interest Charges
Interest on Debt 3,052 2,849 11,488 11,269
Other Interest 1,265 2,314 6,679 10,987
Allowance for Borrowed Funds
Used During Construction (52) 18 (221) (291)
--------- --------- --------- ---------
Total Interest Charges 4,265 5,181 17,946 21,965
--------- --------- --------- ---------
Income Before Income Taxes and
Preferred Dividends of
Subsidiary 15,859 19,700 74,649 75,807
Income Taxes 6,130 7,997 31,256 30,435
--------- --------- --------- ---------
Income Before Preferred
Dividends of Subsidiary 9,729 11,703 43,393 45,372
Cumulative Preferred Stock
Dividends of Subsidiary 242 242 970 1,387
--------- --------- --------- ---------
Net Income 9,487 11,461 42,423 43,985
Dividends Declared on Common
Stock 8,511 8,511 34,046 34,093
--------- --------- --------- ---------
Amount Retained in the
Business $976 $2,950 $8,377 $9,892
========= ========= ========= =========
Ave. Shares of Common Stock
Outstanding-(Basic) (000s) 15,762 15,762 15,762 15,831
Ave. Shares of Common Stock
Outstanding-(Diluted) (000s) 15,768 15,766 15,771 15,835
Earnings Per Share - (Basic) $0.60 $0.73 $2.69 $2.78
Earnings Per Share - (Diluted) $0.60 $0.72 $2.69 $2.77
Dividends Declared Per Share $0.54 $0.54 $2.16 $2.16
CH ENERGY GROUP, INC.
CONSOLIDATED BALANCE SHEET
December December
31, 31,
2004 (1) 2003 (2)
-----------------------
ASSETS (Thousands of Dollars)
UTILITY PLANT
Utility Plant $1,021,912 $959,945
Less Accumulated Depreciation 315,691 309,208
----------- -----------
706,221 650,737
Construction Work in Progress 38,846 56,764
----------- -----------
Net Utility Plant 745,067 707,501
----------- -----------
OTHER PROPERTY AND PLANT & EQUIPMENT 23,139 21,589
----------- -----------
CURRENT ASSETS
Cash and Cash Equivalents 119,117 125,834
Accounts Receivable from Customers 64,436 61,223
Materials & Supplies 21,459 19,847
Fair Value of Derivative Instruments - 869
Regulatory Assets 17,454 4,432
Special Deposits and Prepayments 20,767 23,315
Accumulated Deferred Income Tax 9,454 9,584
Other 13,678 19,834
----------- -----------
266,365 264,938
----------- -----------
DEFERRED CHARGES AND OTHER ASSETS 252,433 316,048
----------- -----------
TOTAL $1,287,004 $1,310,076
=========== ===========
CAPITALIZATION and LIABILITIES
CAPITALIZATION
Common Equity (3) $493,465 $485,424
Cumulative Preferred Stock:
Not subject to mandatory redemption 21,030 21,030
Long-term Debt 319,883 278,880
----------- -----------
834,378 785,334
----------- -----------
CURRENT LIABILITIES
Current Maturities of Long-term Debt - 15,000
Notes Payable 12,000 16,000
Accounts Payable 43,418 40,602
Accrued Interest 4,629 4,274
Dividends Payable 8,754 8,754
Fair Value of Derivative Instruments 906 -
Other 31,795 36,071
----------- -----------
101,502 120,701
----------- -----------
DEFERRED CREDITS AND OTHER LIABILITIES 230,349 298,409
----------- -----------
ACCUMULATED DEFERRED INCOME TAX (NET) 120,775 105,632
----------- -----------
TOTAL $1,287,004 $1,310,076
=========== ===========
(1) Audited.
(2) Subject to explanations contained in the
Annual Report of the Company for 2003.
(3) Shares outstanding at December 31, 2004 = 15,762,000.
Shares outstanding at December 31, 2003 = 15,762,000.
Selected Financial Information
------------------------------
3 Months Ended December 31,
-------------------------------
%
2004 2003 Variation
---------- ---------- ---------
CENTRAL HUDSON GAS & ELECTRIC CORP.
------------------------------------
Sales of Electricity (Mwh): (*)
Residential 468,151 457,045 2
Commercial 470,924 469,582 -
Industrial 365,205 356,397 2
Unbilled and Other 15,078 15,529 (3)
---------- ---------- ---------
Total Own Territory 1,319,358 1,298,553 2
========== ========== =========
Sales of Gas (Mcf.): (*)
Residential 953,252 1,006,642 (5)
Commercial 1,488,139 1,532,195 (3)
Industrial 133,035 143,547 (7)
Unbilled and Other 282,008 272,069 4
---------- ---------- ---------
Total Firm Sales 2,856,434 2,954,453 (3)
Interruptible Sales 1,070,698 985,067 9
---------- ---------- ---------
Total Own Territory 3,927,132 3,939,520 -
========== ========== =========
(*)Includes volumes related
to Electric or Gas Energy
Delivery Services.
Cooling Degree Days:
Billing Cycle 91 98 (7)
Actual in Period - - -
Heating Degree Days:
Billing Cycle 1,049 1,082 (3)
Actual in Period 2,123 2,116 -
Electric Output For Own Territory
(Mwh.):
Generated 53,512 59,357 (10)
Purchased 1,327,728 1,347,036 (1)
---------- ---------- ---------
Total 1,381,240 1,406,393 (2)
========== ========== =========
Gas Send-out Firm Customers (Mcf.) 3,171,467 3,177,090 -
========== ========== =========
CH ENERGY GROUP, INC.
---------------------------------
Earnings Per Share - (Basic) $0.60 $0.73 (18)
Dividends Declared Per Share $0.54 $0.54 -
12 Months Ended December 31,
---------------------------------
%
2004 2003 Variation
----------- ----------- ---------
CENTRAL HUDSON GAS & ELECTRIC CORP.
-----------------------------------
Sales of Electricity (Mwh): (*)
Residential 2,007,695 1,979,676 1
Commercial 1,969,831 1,930,674 2
Industrial 1,477,368 1,432,946 3
Unbilled and Other 37,259 36,408 2
----------- ----------- ----------
Total Own Territory 5,492,153 5,379,704 2
=========== =========== ==========
Sales of Gas (Mcf.): (*)
Residential 5,221,080 5,481,658 (5)
Commercial 6,237,261 6,268,863 (1)
Industrial 565,347 623,075 (9)
Unbilled and Other 36,265 5,520 557
----------- ----------- ----------
Total Firm Sales 12,059,953 12,379,116 (3)
Interruptible Sales 3,540,358 3,451,906 3
----------- ----------- ----------
Total Own Territory 15,600,311 15,831,022 (1)
=========== =========== ==========
(*)Includes volumes related
to Electric or Gas Energy
Delivery Services.
Cooling Degree Days:
Billing Cycle 673 642 5
Actual in Period 673 642 5
Heating Degree Days:
Billing Cycle 5,954 6,552 (9)
Actual in Period 5,982 6,455 (7)
Electric Output For Own Territory
(Mwh.):
Generated 174,434 188,686 (8)
Purchased 5,476,826 5,409,937 1
----------- ----------- ----------
Total 5,651,260 5,598,623 1
=========== =========== ==========
Gas Send-out Firm Customers (Mcf.) 9,934,450 10,262,029 (3)
=========== =========== ==========
CH ENERGY GROUP, INC.
---------------------------------
Earnings Per Share - (Basic) $2.69 $2.78 (3)
Dividends Declared Per Share $2.16 $2.16 -
Dec. 31, Dec. 31, %
2004 2003 Variation
--------- --------- ----------
Book Value Per Share $31.31 $30.80 2
Retained Earnings (000s) $187,772 $179,395 5
Common Equity Ratio (%) 58.3% 59.5% (2)
C H Energy Group, Inc.
------------------------
Selected Financial Indices
----------------------------
Calendar Year 2004 vs Calendar Year 2003
----------------------------------------------
Calendar Calendar
Year Year
2004 2003
--------- ---------
Earnings Per Share - (Basic) $2.69 $2.78
Earned Return on Common Equity (Per Books) 8.52% 8.99%
Pretax Coverage of Total Interest charges, 4.34 x 3.78 x
excluding AFDC
Dividends Declared $2.16 $2.16
Pay-out Ratio 80.3% 77.7%
Percent of Cash Construction Expenditures
Financed from Internal Funds (1) 100.0% 100.0%
Common Equity Ratio 58.3% 59.5%
Retained Earnings ($000) $187,772 $179,395
Book Value Per Share (End of Period) $31.31 $30.80
(1) Internal funds used in this measurement for the Year 2003 exclude
pension contributions of $10,000,000 made in September 2003.
CH Energy Group Segment Information
- 12 Months Ended December 31, 2004
Regulated Unregulated
------------------ ------------------
($000s Fuel
Except Oil
Earnings Natural Distri-
Per Share) Electric Gas bution Other Elim(s). Total
---------- ------------------ ------------------ -------------------
Revenues
from
external
customers $430,575 $125,230 $234,704 $1,003 - $791,512
Inter-
segment
revenues 11 259 - - ($270) -
------------------ ------------------ -------------------
Total
Revenues $430,586 $125,489 $234,704 $1,003 ($270) $791,512
Earnings
before
income
taxes $50,547 $15,558 $4,885 $2,689 - $73,679
Net Income $29,158 $8,521 $2,933 $1,811 - $42,423
Earnings
per share
(basic) $1.85 $0.54 $0.19 $0.11 (1) - $2.69
Segment
Assets @
12/31/04 $767,842 $260,797 $141,613 $116,752 - $1,287,004
(1) The amount of Unregulated EPS attributable to CHEC's other
business activities was $0.03 per share, with the balance of $.08
per share resulting primarily from investment activity.
CH Energy Group Segment Information
- 12 Months Ended December 31, 2003
Regulated Unregulated
------------------ ------------------
($000s Fuel
Except Oil
Earnings Natural Distri-
Per Share) Electric Gas bution Other Elim(s). Total
--------- ------------------ ------------------ --------------------
Revenues
from
external
customers $457,395 $123,306 $224,808 $1,175 - $806,684
Inter-
segment
revenues 9 346 - - ($355) -
------------------ ------------------ --------------------
Total
Revenues $457,404 $123,652 $224,808 $1,175 ($355) $806,684
Earnings
before
income
taxes $47,452 $17,017 $4,886 $5,065 - $74,420
Net Income $28,034 $9,454 $2,999 $3,498 - $43,985
Earnings
per share
(basic) $1.77 $0.60 $0.19 $0.22 (1) - $2.78
Segment
Assets @
12/31/03 $811,950 $240,345 $139,925 $117,856 - $1,310,076
(1) The amount of Unregulated EPS attributable to CHEC's other
business activities was $0.01 per share, with the balance of $.21
per share resulting primarily from investment activity.
CH Energy Group Segment Information - Quarter Ended December 31, 2004
Regulated Unregulated
------------------ ------------------
($000s Fuel
Except Oil
Earnings Natural Distri-
Per Share) Electric Gas bution Other Elim(s). Total
--------- ------------------ ------------------ --------------------
Revenues
from
external
customers $100,743 $29,010 $71,283 $257 - $201,293
Inter-
segment
revenues 2 64 - - ($66) -
------------------ ------------------ --------------------
Total
Revenues $100,745 $29,074 $71,283 $257 ($66) $201,293
Earnings
before
income
taxes $9,480 $2,915 $2,410 $812 - $15,617
Net Income $5,675 $1,714 $1,449 $649 - $9,487
Earnings
per share
(basic) $0.36 $0.11 $0.09 $0.04 (1) - $0.60
Segment
Assets @
12/31/04 $767,842 $260,797 $141,613 $116,752 - $1,287,004
(1) Earnings for Unregulated Other results primarily from investment
activity.
CH Energy Group Segment Information - Quarter Ended December 31, 2003
Regulated Unregulated
------------------ ------------------
($000s Fuel
Except Oil
Earnings Natural Distri-
Per Share) Electric Gas bution Other Elim(s). Total
---------- ------------------ ------------------ -------------------
Revenues
from
external
customers $103,999 $27,005 $57,134 $379 - $188,517
Inter-
segment
revenues 1 86 - - ($87) -
------------------ ------------------ -------------------
Total
Revenues $104,000 $27,091 $57,134 $379 ($87) $188,517
Earnings
before
income
taxes $11,699 $4,504 $2,495 $760 - $19,458
Net Income $6,946 $2,410 $1,519 $586 - $11,461
Earnings
per share
(basic) $0.44 $0.15 $0.10 $0.04 (1) - $0.73
Segment
Assets @
12/31/03 $811,950 $240,345 $139,925 $117,856 - $1,310,076
(1) The amount of Unregulated EPS attributable to CHEC's other
business activities was $0.01 per share, with the balance of $.03
per share resulting primarily from investment activity.
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